Learning from others’ experience: AB InBev
There is a common misconception that scale slows you down and that it takes a long time to change the course of a large global business. However sometimes it is the big businesses that have a better understanding and experience in how to adapt.
During the pandemic, this has very much been the reality for AB InBev. HBR talks to its CEO Carlos Brito in one of its latest podcasts about how the global power house has adapted in the face of crisis — this article breaks down the following points made in the interview, including:
- How to adapt supply chain models globally by monitoring data trends in other markets
- Why it’s important to implement reopening initiatives based on changing consumer behaviors per region
- The importance of leveraging partnerships for brand awareness and social good
- Planning for the future and understanding which changes that were made during the pandemic to keep moving forward
An agile supply chain
The biggest market outside of the U.S. for AB InBev is China. The initial spike in COVID-19 cases in China saw sales figures migrate away from bars and restaurants to home and supermarket sales. Consumers began to recreate ‘occasions’ at home e.g. watching sporting events. From a supply chain perspective, the learning from this was that consumers did smaller trips to the supermarkets to buy ‘big packs’ of beverages. This insight was crucial to preparing for a similar trend in Europe, Africa and the US, as the virus spread.
In order to implement the changes in supply and distribution, agility was needed in adapting and sticking to the new safety protocols to deliver to supermarkets globally (read more on Domo’s approach to this problem). The objective was to ensure the AB InBev consumers see consistent availability from the brands they like to buy.
How does this agile approach filter down across a global company? AB InBev fosters an ‘ownership mindset’ as part of its corporate culture, encouraging regions to make business critical decisions without going through waves of approvals which allows the company to remain liquid and adaptable.
Tracking and moving with changing consumer behaviors
The priority beyond the safety of employees is a strong recovery post COVID-19. Research from AB InBev unsurprisingly showed that consumers post-pandemic want to prioritize seeing friends and family, going to restaurants, sporting events and travelling.
To help enable this, they have been working with customers globally to provide equipment to help facilitate reopening. Examples of this include providing the physical barriers (floor dividers, retractable barrier tape) to use across the outdoor spaces at pubs and restaurants, allowing for the feeling of togetherness while also remaining at a safe distance. This corporate responsibility and lateral thinking works towards the ultimate goal or helping the core business recover.
AB InBev’s partnerships with communities and governments has been crucial during this time. Providing examples of corporate responsibility to governments has led to government officials mentioning AB InBev on national television in LATAM as a way of how local businesses can utilise larger enterprises to help reopen. This type of exposure leads to further education on tactical ways businesses could leverage AB InBev — an example Brito gives is providing vouchers for consumers to purchase through local businesses’ social media, to use when the pubs and restaurants reopen, helping maintain some consistency in revenue.
Looking to the future
Brito notes that it’s important to focus on what you can control in times of uncertainty. For things you can’t control, create scenarios you can prepare for e.g. different markets recover at different speeds triggering different sets of actions. Planning for scenarios allows for better responsiveness in the supply chain, ultimately saving money and helping progress a quicker recovery.
From an internal perspective, AB InBev has reintroduced employees to the physical work space in a phase approach e.g. different job functions in the office at different times. However during the height of the pandemic, the global enterprise did prove that it could work from home in an efficient way (a problem we’ve also addressed with the Productivity Indicators App). It also gave time for teams to use technology across the business to set up channels for those who faced mental health issues during the challenges times — ensuring all staff had access to help when needed as they transitioned from the workplace to the home environment.
Brito closes by highlighting AB InBev’s bigger picture thinking when it comes to business sustainability. He outlines the fact that AB InBev takes no shortcuts in business decision making, learning from its past as a 600 year old company,
“You don’t need to focus on P&L if you want a company to last forever”.
This mentality is present to this day, which is why culture, community and partnerships play such an important role in creating a strong and sustainable business.
With most organizations likely to return to work via a hybrid model of a physical and digital workplace, Brito’s point of company culture is something that all businesses will need to work hard on to maintain. Applications will become a large part of inter employee communication, with apps such as Domo’s Safe Worker App helping open dialogue to answer some or the more critical questions, ensuring all employees feel safe, before more informal layers of communication are mounted on.